Tarrifs, and now a dropping US dollar...

[hornbuilder]

The US$ used to be at a relative 1:1 parity to the Euro. That has changed noticeably, with it currently costing US$1.14 for 1 Euro. And dropping.

[BGuttman]

The Euro has always been a little above the dollar. I'd really be worried if it got to $1.25 to the Euro or more.

[chromebone]

The even bigger concern should be rising bond yields. Essentially, investors are betting against us at this point That’s likely the reason Trump backed off of some of the tariffs, (although it’s still not entirely clear what is or isn’t in at this point) but it’s still not enough to stop us from hurtling us towards recession, or worse, if this keeps up.

[LeTromboniste]

A better indicator than the Euro, which is somewhat volatile (and itself not particularly strong these days), is the Swiss Franc (CHF), which is very stable and considered by many a "safe haven" currency. Both the EUR and the USD are extremely low to the CHF right now (all-time low for the EUR, and only second lowest for the USD after a brief window in 2011 where the Franc was rapidly valuating). In the last 10 years, the USD has typically been close to parity with the CHF, typically staying between $0.98 and $1.08 to the CHF. Right now it's at $1.226.

[BGuttman]

A better indicator than the Euro, which is somewhat volatile (and itself not particularly strong these days), is the Swiss Franc (CHF), which is very stable and considered by many a "safe haven" currency. Both the EUR and the USD are extremely low to the CHF right now (all-time low for the EUR, and only second lowest for the USD after a brief window in 2011 where the Franc was rapidly valuating). In the last 10 years, the USD has typically been close to parity with the CHF, typically staying between $0.98 and $1.08 to the CHF. Right now it's at $1.226.

Wow. When I was in Switzerland back in the 1990s it was going from 3 ChF to 2 ChF to the dollar. I should have loaded up on francs back then

[Bach5G]

Is it fair to assume US-built Shires can re-enter the US from Canada tariff-free?

I mean,I can’t think why they’d be tariffed, but I may be missing something.

[ghmerrill]

Wow. When I was in Switzerland back in the 1990s it was going from 3 ChF to 2 ChF to the dollar. I should have loaded up on francs back then

Yeah, I spent 2001 working for Novartis in Basel (well -- back and forth to Basel from the US). I bought a lot of Swiss stuff. The exchange rate was great. Take a look at the graph of that over the period since then (through several US Democratic and Republican administrations) and you'll see what comes close to averaging out to a 45-degree slope. Lots of issues involved in that, including a bunch of things the Swiss have been doing to move forward in different directions.

[harrisonreed]

I feel like I remember when the euro was 1 to 2 USD. Same with the British Pound.

[ghmerrill]

I remember when gold was $35/ounce and fixed at that value. Now, for $35, you might be able to look at some gold -- from a suitable distance.

[elmsandr]

Is it fair to assume US-built Shires can re-enter the US from Canada tariff-free?

I mean,I can’t think why they’d be tariffed, but I may be missing something.

There are still import duties if you are buying something from another country. Depending, it can be tax free; I don’t know the limits regarding musical instruments. Where the horn was made doesn’t matter. The fact that you bought it in Canada is what matters.

Cheers,
Andy

[BGuttman]

Note: tariffs are applied to purchase price and are not charged on items brought across the border if you don't plan to sell them.

[Bach5G]

Something new.

News story this am about European postal services:

‘Germany, Denmark, Sweden and Italy said they will stop shipping most merchandise on Saturday. France and Austria will halt shipments on Monday, and the United Kingdom will follow on Tuesday.’

Up until now, US customs didn’t concern themselves with items worth less than $800 under the de minimus rule. But it sounds like they will look at everything. So, when the Royal Mail ships a package to the US, who is responsible for any tariffs? I suppose if I sell my Shires and Rath mpcs to someone in the US, the Rath is tariffed while the Shires is not.

This is largely a business process issue which will be worked out eventually.

[BGuttman]

The tariffs are paid by the US recipient. Whether goods originally made in the US and shipped from a foreign source are subject to the tariff I don't know.

[StephenK]

Up until now, US customs didn’t concern themselves with items worth less than $800 under the de minimus rule. But it sounds like they will look at everything. So, when the Royal Mail ships a package to the US, who is responsible for any tariffs? I suppose if I sell my Shires and Rath mpcs to someone in the US, the Rath is tariffed while the Shires is not.

Though I don't think Rath mouthpieces are actually made in UK, though sold from UK. No matter. Royal Mail have become really unreliable since being sold off, quite a lot of suggestions to remove 'Royal' from their name. If you can get packages shipped from Europe to US, it will be the importer paying the tariff.

[chromebone]

The dollar just went from bad to worse. If the Fed is no longer seen as independent, this will end very badly.

[Posaunus]

The dollar just went from bad to worse. If the Fed is no longer seen as independent, this will end very badly.

So it's "us" against "them" (whoever "they" are).
And right now, "they" appear to be winning!

[Bach5G]

An Epiphone guitar caught my eye today. These are made in Asia. Epiphone is a subsidiary of Gibson, which is, of course, an American company.

The guitar was $900 CDN. While checking out reviews, I noticed the Sweetwater price was $860 US. That’s about $1200 CDN. About 30% more.

[Digidog]

The tariffs are paid by the US recipient. Whether goods originally made in the US and shipped from a foreign source are subject to the tariff I don't know.

Nobody knows!

I have had real troubles with shipments both to and from the U.S. and the moratorium on shipments to United States comes - from what an officer at the Swedish customs told me - from the fact that noone, nowhere, really knows what charges should be added, who should pay them and to what and where they should be paid - and how those payments should be tracked and registred.

Orange man could as well have handed out his personal account number, and said that he personally would clear everything that's been paid for. It's that level of administration nowdays....

[musicofnote]

The tariffs are paid by the US recipient. Whether goods originally made in the US and shipped from a foreign source are subject to the tariff I don't know.

A message from Wedges Dr. Dave in Canada:

"We have an update on the tariff situation.

Canada post has provided the following information.

Tariffs will go into effect on August 29th for "most shipments".

The Canada Post collection system should be in place by August 28th, but they do not know exactly what the system will be yet.

They have shared that they will be integrating with a 3rd party app to allow us to pay the projected 35% tariff at the time that we generate a shipping label. We will have to either increase prices for US customers by 35%, charge them the tariff at checkout, or absorb the tariff, which is impossible given that 35% is more than our profit margin on mouthpieces.

Even though our customers will have to pay the tariff we will bear the administrative costs of using the third party app, which will be 10% of the tariff amount plus a flat fee, and will cost us about $10,000 a year based on our current sales into the US.

So far there is plan in place at Canada Post for handling returns or exchanges. Specifically there is no plan in place for refunding the tariff on returned goods, and mouthpieces sent out in exchange will probably be tariffed a second time.

Canada Post does not know if our products will be spared under the USMCA agreement (although they should be spared according to the Canadian government), but Canada Post thought probably would be taxed based on the information they had.

There is no grace period or other provision for mouthpieces that have already been ordered and are in production but have not been shipped, meaning we will have to either absorb the tariff, cancel the order and issue a refund, or request a payment from customers who have already ordered and paid for their mouthpieces.

Paying the tariffs ourselves would cost about $10,000 on orders currently in production.
We were told that there might be more information about some of the unknown issues tomorrow, but it will probably be a few weeks before it is clear how the system will work.

I will keep our customers updated as more information is available. We are shipping as usual with Canada and all other countries other than the US, but will not be accepting orders or shipping to the US until furher notice.

The one viable option in might be to ship to the US by UPS, in which case you will probably be charged a 35% tariff by UPS prior to delivery.

We are sending emails to all of our US customers who have orders pending to explain the situation.

Stay tuned."

[BGuttman]

Another example of how poorly thought out this tariff policy is. It was a fiat by "Dear Leader" who really doesn't think things through.

[marccromme]

... It was a fiat by "Dear Leader" who really doesn't think things through.

I think the culprit is more the US voters not thinking things through before voting for the orange demolition man.

Unfortunately it has bad impact on the entire world. Not only shipment of music goods, but much worse, affecting my pension savings badly too.

[sf105]

There is apparently one tiny silver lining which is that the reduction in items shipped has led to a reduction in carbon emissions. Not enough to compensate for all the other tomfoolery, but something.

[JKBone85]

I feel like I remember when the euro was 1 to 2 USD. Same with the British Pound.

Back when cruise ship work was worth it, if you had a gig with P&O or Cunard.

[Posaunus]

I feel like I remember when the euro was 1 to 2 USD. Same with the British Pound.

Since 2002 (when the Euro was first introduced as a currency) its peak value was $1.5676. Currently about $1.17.

In the 1960s, the British Pound was fixed at $2.80. In 1975, it still fetched $2.41. A rapid decline began in 1981; there was a peak of $2.07 in November 2007; the Pound has been less than $1.50 since December 2015. Currently about $1.35.

https://www.macrotrends.net/2548/euro-d ... ical-chart

https://www.poundsterlinglive.com/bank- ... GBP-to-USD

[JTeagarden]

The tariffs are paid by the US recipient. Whether goods originally made in the US and shipped from a foreign source are subject to the tariff I don't know.

Nobody knows!

We used to: there was a tariff exception for goods the were originally manufactured in the US (unless modified/improved out of the country), so if you had bought an unmodified MV Bach horn from someone in the UK, it was exempt from US customs when repatriated to the US.

[Digidog]

We used to: there was a tariff exception for goods the were originally manufactured in the US (unless modified/improved out of the country), so if you had bought an unmodified MV Bach horn from someone in the UK, it was exempt from US customs when repatriated to the US.

The keyword here is:

used to

.....since all these tariffs are so hastily implemented that no institution have had the time to prepare, decide and formulate how the administration of them should be done. How a tariff is decided on a product, to where a tariff should be paid, how it is registred to be declared legally valid and to avoid double fees, and so on..... Not in the EU and most certainly not in the U.S.